The Government will amend the GST law to remove uncertainty in relation to the GST treatment of some types of real property, the Minister for Revenue and Assistant Treasurer, Peter Dutton, announced today.
The decision of the Full Federal Court in the Marana Holdings Pty Ltd v Commissioner of Taxation [2004] FCAFC 307 case has resulted in a blurring of the lines between properties that are subject to GST and those qualifying for input taxed treatment, Mr Dutton said.
The Government will amend the GST law to continue the tax treatment of property that existed prior to the Court's decision.
It is appropriate that supplies involving properties such as serviced apartments and strata units leased to hotel operators remain input taxed. This is consistent with the Government's policy intent and will avoid the need for many small investors to register for the GST, Mr Dutton said.
The amendments will apply from 1 July 2000. As this measure affects the GST revenue base, it will be subject to the unanimous approval of the States and Territories, which receive the GST revenue.